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2023 (6) TMI 894 - HC - Indian LawsDishonour of Cheque - vicarious liability of director - whether the complaint was maintainable under Section 138 of the Negotiable Instruments Act against its Director in absence of the company being joined as party respondent accused in the original complaint? - HELD THAT:- The issue is no more res-integra. The issue arose for consideration of the Hon’ble Supreme Court in the case of Aneeta Handa [2012 (5) TMI 83 - SUPREME COURT]. The Hon’ble Supreme Court was examining the controversy as to whether any person who has been mentioned in Section 141(1) and 141(2) of the Act can be prosecuted without the company being impleaded as accused. To appreciate the controversy, the Hon’ble Supreme Court had proceeded to examine the relevant provisions of the Negotiable Instruments Act. The Court upon careful examination of Section 138 of the Act and upon appreciation of the proviso, notice that cheque has to be drawn by a person on the account maintained by him and must have issued the cheque in discharge of any debt or other liability. The Hon’ble Supreme Court further notice that the word “drawer” has been defined under Section 7 of the Act which mean maker of a bill of exchange or a cheque. Thus, the Court held that even an authorized signatory in company becomes a drawer as he has been authorized to do so in respect of account maintained by the company - The Hon’ble Supreme Court upon analysis of the deeming fiction created in the proviso to Section 141 held that it crystallizes the corporate criminal liability and vicarious liability of a person who is in charge of the company. Thus from the aforesaid legal position, there cannot be any iota of doubt for maintaining prosecution under Section 141 of the Act, the company must be joined as an accused. The other categories of offenders can only be brought in the dragnet on the touchstone of vicarious liability as the same has been stipulated in the provision itself. The Court notice that in absence of specific averment as to the role of the respondent and particularly in view of the material at the relevant time, which in no manner connected with the affairs of the company, rejected the appeal of the complainant. In the instant case, the contents of the complaint as reproduced in the impugned order goes to suggest that the complainant has even failed to make necessary averments with regard to the role of the accused by virtue of his position to make him liable or to be proceeded with the prosecution under Section 138 of the Negotiable Instruments Act. As held by the Hon’ble Supreme Court in the case of Aneeta Handa, criminal liability can be only imposed if the principal offenders viz. concerned company being joined as party accused - thus no error is committed by the learned Magistrate in not entertaining the complaint having noticed the lacuna of not joining the company as party respondent. The present application of leave to appeal fails and stands rejected.
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